Discussion of Results on electronic customer relationship management on performance of
commercial banks
The study’s main objective was to ascertain the effect of electronic customer
relationship management on performance of commercial banks in Nairobi City
County, Kenya. Influence of each of the predictor variable on the response variable was
analyzed in terms of strength and direction. Descriptive statistics indicate that the electronic
customer relationship management is exhibited to a small extent in the Kenyan commercial
banks but competitive advantage and performance is exhibited to a great extent. The
correlation analysis findings showcased that electronic customer relationship management
has no significant association with organizational performance. The regression analysis
before introduction of the moderating variable showcase that electronic customer
relationship management has no significant impact on organizational performance.
The rapid growth in electronic banking indicates a major move towards use of electronic
money as opposed to the over-the-counter customer service. This leads to the need to
analyze how E-CRM is working in order to harness how to use it to gain competitive
advantage. Electronic customer relationship management has been used in KCB for some
years and is beneficial to customers in spite of some challenges (KCB, 2018). Some of these
challenges can be identified by interacting with those utilizing the electronic channels
(Dzombo et al., 2017). However, according to this study, interaction with participants was
rated as average and this offers an opportunity for improvement that may lead to the banks
growth. This is especially so noting that the participants were willing to use all the means of
communication that are available. Despite this openness, more than half of the participants
identified phone calls as the quickest way to solve customers’ e- banking problems. This
shows the perception that dealing with a person one can talk to may lead to faster solutions.
Social media was second and this shows that customers are becoming more tech savvy
though there is still the problem of forgetting passwords or pin numbers.
This study had participants from both primary and support activities. Those in the primary
include sales and marketing while support activities are essential roles supporting the
primary activities such as human resource. With more than fifty percent of the participants
working in non-management positions, they are more likely to interact directly with
customers. All these provide an effective way of weighing the position of the banks against
major competitors with the aim of sustaining a competitive advantage (Pearce & Robinson,
2013). Githaiga (2013) study had a majority of the staff aged 30-49 years and mostly men
similar to this study, however, more participants were 26-33 years. These are the youth who
are expected to be technology savvy and therefore more likely to quickly adapt to E-CRM.
The education level was significant showing the tendency of banks to work with degree level
individuals.
A bank’s customer touch points can consist of the internet, automated machines, agents,
email, sales, direct mail, telemarketing, operations, call center, fax, mobile banking, point of
sale terminal and virtual e-wallets (Sivaraks et al., 2011). In this study, the preferred touch
points were email, social media, telebanking, online banking service and customer service
showing that participants were open to using majority of the available systems to interact
with the banks. In spite of this, systems delays may inconvenience the user and it was the
most mentioned complaint during use of e-banking. Banks may improve the time taken to
access and use the electronic systems which may increase its usage and therefore give them a
competitive advantage. Empirical studies on E-CRM show various competitive advantages,
for example, reduced response time and a better turnaround time to customer enquiries (Abu-
Shanab & Anagreh, 2015). This was shown by participants reporting they valued safety,
convenience, speed and reliability when using electronic banking systems. As a result of
improving what the participants’ value, there may be an increase in the number of customers
using e-banking. The end result may be more business and more profits.
The study’s secondary objective was to determine the influence of competitive
strategies on the relationship between electronic customer relationship management
and performance of commercial banks in Nairobi City County, Kenya. After the
introduction of the moderating variable, it has a significant negative relationship with
organizational performance. The regression analysis also exhibited that electronic customer
relationship management and competitive advantage can be used to predict organizational
performance. The coefficient of -0.307 obtained for electronic customer relationship
management in the study implies that a unit increase in electronic customer relationship management
would cause a 0.307 units decrease in organizational performance. The coefficient of 0.769 obtained
for competitive advantage in the study implies that a unit increase in competitive advantage would
cause a 0.376 units increase in organizational performance.
The relationship between e-CRM and competitive advantage is underpinned by the
acknowledgment that it is more expensive to acquire a new customer than to keep one
(Salmen & Muir, 2013). Customers are searching for various benefits from banks including
better services, lower transaction fees and access to the bank from different convenient
channels. Therefore it is important to look at the relationships with a customer in terms of
quality and outcome. As shown in this study, branch staff were perceived as welcoming,
knowledgeable and handled complaints satisfactorily by the participants. A knowledge gap
on the effect of technology on customer retention in banking or other service industries was
identified by Wanjau (2013) study on the effects of customer relationship management on
customer retention in commercial banks in a case study of KCB Kenya Limited Nairobi
region. This was also addressed in this study. Observation of customer challenges of using
a company product or service can present unexpressed needs that often translate to business
growth opportunities (Pearce & Robinson, 2013). In this study, some challenges reported
were an average rating of banks response to general enquiries to the electronic system,
perception on security issues on some e-banking services, cost of transactions influencing
the mode of e-banking system used to transact and system delays. By working on this
short falls, the banks can make E-CRM more efficient and effective and thus gain
competitive advantage over banks that fail to do so. This is especially noting that if a
customer is satisfied with a service, they may recommend it to friends and family.
In Edusah (2011) study, the treatment from bank staff was reported as positive by 78% of the
customers. Fifty-four percent (54%) respondents reported that they knew of the opportunity
to complain with 78% of them satisfied with the complaints handling. This study reported a
similar high level on handling of complaints. Respondents in Edusah (2011) study also
reported the bank was not doing well in the area of consulting customers when new products
were being introduced which may be the reason most of the participants in this study
wanted to be involved or informed on new programs or services.
Riugu (2017) study recommendation was that KCB considers improving its electronic
products to operate as promised and shift to a knowledge-based economy. This study sought
to provide some of that knowledge by researching on electronic services perceptions, for
example, agency, mobile and electronic banking that have resulted in a significant access to
banking services (Dzombo et al., 2017). This has brought about an increase in business, but
also some issues as shown in this study that need to be addressed and if that is done, it may
lead to competitive advantage. As shown in this study security and fraud were not major
issues, however participants were not sure if point of purchase e-machines were effective
and safe to make payments using debit and credit cards. A similar trend was reported with
regards to e-money wallets though a lower level of uncertainty was reported on agency
banking. Addressing these worries can provide a way for banks to gain competitive
advantage. These new technologies are utilized by banks to achieve customer intimacy, drive
their preferences to deliver stronger relationship and coordination of customer retention and
acquisition (KCB, 2018). For example, though some participants agreed that mobile banking
was a positive way to transact business with family and friends, not all of them were willing
to recommend internet banking to friends or family. This could be improved by addressing
some of the challenges such as security and cost of transactions.
A study by Ng’ang’a (2017) reported that most of the staff had the relevant skills required
for operation and use of e-CRM strategy within the firm such as online management and
practices. The study showed a wide range of perceptions on whether banks offer regular
training on global E-CRM with about half not sure or disagreeing. Another Kenyan study
showed that information technology and human resource capabilities showed a positive
effect on organizational performance that was significant (Githinji, 2017). In this study,
many participants agreed that E-CRM training was effective with a majority reporting that
they would appreciate being involved or informed before introduction of new programs or
online services in electronic banking. Therefore, involving staff may lead to them having
more information on the system which may translate into more effective and efficient
services to the satisfaction of customers. In Githaiga (2013) study, the use of CRM programs
as a strategy to achieve competitive advantage in the banking industry using KCB Kenya Ltd
listed CRM benefits that included better organization performance, enhanced market
productivity, market effectiveness and organization learning similar to this study where
participants reported that e-CRM training can be effective and that it offers competitive
advantage for the bank that utilizes it effectively to the satisfaction of customers.
Competitive advantage via customer value can be analyzed by looking at customer wants,
company services and competitor services carefully to clearly state what the firm’s
competitive advantage is and how it is different from those of the competitors as discussed
above. This can be by improving the response levels on enquiries on the electronic systems.
It can also be by understanding what those using the system value, for example, participants
in this study valued convenience, reliability, speed and safety. The fact that system delays
was the most common complaint is a clear sign that this is an opportunity for improvement
resulting in an advantage to the bank that reduces system delays. By analyzing what
customers of their service value most and why and also how well the company is delivering
its services can result in identifying how to create a competitive advantage (Pearce &
Robinson, 2013). This has been analyzed in this study with a focus on perceptions and needs
which can be used to enhance organization performance by promoting effective and efficient
management of customer relationship that benefits both the bank and its customers
(Ng’ang’a, 2017). This will result in the banks increasing their capacity in a competitive
market, increasing profit rates, reducing costs and increasing marketing knowledge (Abu-
Shanab & Anagreh, 2015). Therefore developing a close association between customers and
a bank may lead to an added opportunity for competitive advantage (Recklies, 2006).
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